Soybean Hedges Spring into 2012

Adviser activity in the corn market was somewhat subdued last month as hedge positions remained mostly steady, with slight increases. Soybean hedges, however, jumped last month as the soybean rallied more than $1.10 in February.

Old crop soybean sales saw the largest gain last month as hedges increased 15%, led by the Dynamic Hedge program. The 2012 crop soybean hedges crept higher by 5% in February, and the soybean market has been the clear leader of the recent grain rally. The advisers in the Archer Financial Services, Inc., Ag Hedge Program rewarded that market strength by sweeping old crop soybean inventories. The focus at press time was squarely on the March 30 USDA end stocks and acreage reports.

The recent rally has provided an opportunity for many advisers and producers to get to a more comfortable hedge position leading up to these reports and the beginning of the planting season, says Scott Harms of Archer Financial Services.

Soybeans Capture Spring Trade. "The soybean market closed higher in 16 of 20 trading sessions last month and has only continued that trend into March," Harms explains. "It’s tough not to reward a rally of that magnitude. We are not overly bearish on soybean values, it’s just that prices rallied to the upper end of our expected trading ranges and it was time to establish temporary hedge protection."